Of course, getting some bespoke software created around your exact needs would be ideal, but is it worth the cost? If your business is small, perhaps you have up to 5 or 10 people in your team, and you provide a simple or low cost service, you may wonder if it’s even affordable at all?
Common concerns about the cost of bespoke software
Do I need to pay upfront?
Many software companies will demand a 50% deposit upfront, which can cost hundreds or thousands of £s. This could be to cover their overheads, and secure more developers. While many professional software agencies will charge this high level of deposit upfront, it can leave you vulnerable if your software system doesn’t get completed to your satisfaction. There are cases of techies “taking the money and running”, and we’ve helped many business owners overcome their fear of working with an independent software developer.
Because we understand how important cash-flow is for small businesses, we usually charge 20% or less, and would much rather build trust upfront. We think it’s important to invest time initially to get to know you and your business processes, understanding exactly what you need from a system, and only then starting development on it. The development fee can also be split into monthly or quarterly payments as we work together with your team throughout the entire process.
How quickly will I make my money back?
Like many things in business, bespoke software is not an expense, but an investment. As it’s a bespoke service, it is almost impossible to know how much it will cost before the project has been discussed in length with a software developer. It’s important for us to invest time in scoping out your needs for the system and there’s no charge for this, even if you decide not to go ahead with the project. Many projects begin with a few phone calls and meetings before the project is fully scoped out and priced up.
The amount of man-hours you’ll save with bespoke software is significant. Although not everyone’s aim is to make staff redundant, software is designed to automate any time-consuming manual tasks, so your staff can focus more on human-centered jobs like customer service and sales.
The UK government has a scheme for claiming tax relief on R&D, which includes bespoke software development. Many of our clients have found that the amount they’ve claimed comes pretty close to the cost of the development, so it’s easier than you might expect to get a return on your investment, within a year!
What affects the cost of bespoke software?
1. Would your system need to talk to a different system or use functionality of another?
Many businesses need features which rely on connecting to other systems. A popular example is “postcode lookup” – for sending engineers, members of staff or products to the correct address, or for customer analytics. Although this can be free for small volumes, connecting to these types of systems can also cost extra, depending on your usage needs. As the costs come from Google, Royal Mail or a data reseller, your software developer would have to pass this cost on to you. We’re always transparent about extra costs like this upfront, in the project scoping stage.
2. Complexity of the system and time involved
Most business people just need a system that stores data in some way – like a CRM. If this is you then you probably don’t need a bespoke system, there’s plenty of ready-made CRM software available for free or low-cost.
But if you need business-specific tasks to be automated, such as creating quotes that calculate all the variables in your products, every feature you need will take a developer time to create.
Perhaps you run a fairly simple business but your staff aren’t tech-savvy at all, and you’ve been using manual processes, paper and pen, or Excel. You’d benefit from a simple bespoke system that’s designed to be really easy to use. Most off-the-shelf software will do too much and can confuse staff, but bespoke software is made to include only what you need. Specific team members may need to look at information relevant to them only, while the manager or business owner would need access to all the information, and perhaps a management dashboard. Simpler systems are still made entirely from scratch but are likely to cost less, as they will take less time to develop.
3. Hourly rate of the developer
The biggest cost factor for your software project is how much your software developer charges for their time. A decent UK-based software developer will generally charge around £50/hour.
Why are some software developers cheaper?
If you find cheaper software developers this will usually mean that the work is being done offshore (rather than in the UK) which can come with a whole host of problems. Or the work will likely be done by an inexperienced coder or by someone who is moonlighting, and isn’t available full-time during normal office hours.
Why are some software developers more expensive?
More expensive software developers are usually specialists in a niche area or have advanced technical knowledge. You’re paying for their expertise and many years of learning. As technology is changing so quickly, a good software developer is always learning the newer ways of working and the new technologies available. However, there are many “software experts” out there that have been in the industry for decades but haven’t ever evolved their skills and knowledge. Being resistant to change is not a great sign in the world of technology – so someone’s age isn’t always the best indicator of their knowledge and experience.
How do Source Code Software’s prices compare?
Our software development rate is typically £480+VAT per day. While Kris is a highly skilled software developer, we’re currently able to keep our costs lower than others with his experience. We’ve created a lovely home-based office and don’t waste money on unnecessary expenses, and we believe in helping small business owners rather than just huge wealthy organisations. Right now it’s just Kris & Sam so you’re paying for our time and skills, and perhaps the odd cup of tea when we come and visit you.
What ongoing costs are there?
Monthly maintenance & support fee
Once the development phase is complete you would then expect to pay a monthly fee to cover the costs of hosting your system as well as support and maintenance. The cost of this typically varies between £100 – £500 per month based on the size and complexity of your system, and the number of users. The monthly fee will also depend on the speediness of fixes and how much support you and your team need.
A good software development company will fix bugs for free as standard – after all a bug is usually a problem they created (LINK to bugs vs dev vs tweaks article).
As your business and technology will always be evolving, it would be worth discussing an average amount of ongoing future development, so your software will always be up-to-date. We would usually agree this in the scoping phase, and review it with you regularly.
What should I do now?
Now that you understand a bit more about how bespoke software is priced, you might have some more questions. If we haven’t answered them in another article, go ahead and give us a ring or email. We’d love to chat.